Canals Feel Ripples of Container Shipping Crisis as Vessels Go the Long Way Round
By Gavin van Marle
(The Loadstar) – The Panama and Suez canals may very well be the subsequent establishments to be affected by the continuing disaster within the container transport business, in line with new evaluation from Africa ports analyst and monitoring service portoverview.com
The twin elements of mobile overcapacity and rock-bottom bunker prices have, over the previous 12 months, led carriers to divert a number of sailings away from the world’s two principal commerce arteries and reroute vessels across the southern African cape.
Its six-month report for the second half of 2015 quoted evaluation from SeaIntel (portoverviw.com co-owner), which confirmed that for the reason that finish of October 2015, 115 vessels deployed on Asia-USEC and Asia-North Europe providers have made the back-haul journey to Asia by crusing around the Cape of Good Hope quite than by means of the canals regardless of utilizing them on the headhaul legs.
Three of those vessels have been deployed on Asia-North Europe providers, whereas the remaining 112 have been returning to Asia from the US east coast.
“Normally, 78 of those voyages would have gone through the Suez Canal, and as 53 of the voyages were in 2015, it would have meant that the number of container vessel passing the Suez Canal in 2015 would ‘only’ have decreased by 1.9% year-on-year, instead of the reported 2.8%. The other 37 vessels would normally have passed through the Panama Canal,” portoverview.com stated.
“SeaIntel concludes that both the canals face a significant challenge in the current low bunker price, as it means that for many services it is cheaper to sail south of Africa on the backhaul than to use the canal routings,” it added.
“The canals have a particular disadvantage in regard to the USEC-Asia services, where it is currently economically viable for 14 out of 22 services to sail south of Africa on the backhaul, and it would probably be viable for almost all of them if intermediate port calls were dropped.”
It is even viable for sailings from North Europe to Asia to route by way of South Africa, “if the intermediate calls were dropped or switched to other services”, it stated.
“Currently, the carriers are only using the south of Africa routing on the backhaul legs and retaining the transit time, but considering the financial situation of most carriers, and keeping in mind the relative ‘ease’ with which the carriers implemented both slow-steaming and super slow-steaming, going south of Africa on the head-haul is going to look very alluring for some carriers, if indeed they can re-route the cargo from the intermediate port calls.”
There is an additional, compelling, motive for carriers to route by way of South Africa: along with avoiding canal transit charges, the elongated crusing route, which provides one other week to transit instances, may doubtlessly “soak up” between 60-80 vessels, of which half can be ultra-large container vessels, and take out among the business overcapacity which is inflicting freight fee volatility.
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